The Designers of the Federal Reserve Act Meant to Create

question 62

Multiple Choice

The designers of the Federal Reserve Act meant to create a central bank characterized by its

• A) system of checks and balances and decentralization of power.
• B) strong concentration of power in the hands of a few people.
• C) inability to function as a lender of last resort.
• D) responsiveness to the electorate.

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Definitions:

Call Protection Provision

A feature of a bond that prohibits the issuer from redeeming the bond before a specified date, protecting bondholders.

Bond Indenture

A legal contract between the bond issuer and the bondholders, detailing the terms of the bond such as interest payments, maturity date, and the issuer's obligations.

Call Features

Options embedded in financial securities that allow the issuer to redeem the security before its maturity date.

Call Premium

The extra amount paid above the bond's face value for calling a bond before its maturity date, compensating the bondholder for early redemption.